FLEET DEFECTS Clause Samples
The 'Fleet Defects' clause defines the procedures and responsibilities when a defect is discovered in a product or component that is part of a larger fleet, such as vehicles, aircraft, or equipment. Typically, this clause requires the supplier to notify the buyer if a defect is found in any unit of the same model or type, and may obligate the supplier to repair, replace, or otherwise address the defect across all affected units. This ensures that systemic issues are managed proactively, minimizing operational risks and costs associated with widespread defects, and helps maintain safety and reliability across the entire fleet.
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FLEET DEFECTS. A fleet defect is defined as the failure of identical items covered by the warranty and occurring in the warranty period in a proportion of the vehicles delivered under this contract. For the purpose of this bid, identical defects occurring in sixty (60) percent of vehicles delivered shall be considered a "fleet defect."
FLEET DEFECTS. A. If, at any time prior to the expiration of the Warranty Period, any single failure mode of an item develops and the rate of failure reaches 20% of the total number of such items during any 12 consecutive month period, it will be deemed a Fleet Defect. The rate calculation shall start when all Rail Cars of the Base Order are accepted and continue until the expiration of the warranty applicable to that Item on the last Rail Car accepted by the Authority in the Rail Car Fleet.
B. The Contractor shall correct Fleet Defects at the Contractor’s sole cost. After correcting the Fleet Defect, the Contractor shall promptly undertake and complete, at the Contractor’s sole cost, a work program reasonably designed to prevent the occurrence of the same Fleet Defect in all other Rail Cars purchased under this Contract including those for which the individual Rail Car or Unit warranty has already expired. The work program shall include inspection and repair or replacement of the defective Units in all the Rail Cars delivered or to be delivered under this Contract.
C. The warranty on Units arising from Defects determined to be Fleet Defects shall apply to the entire fleet of Rail Cars delivered or to be delivered under this Contract, and as to Rail Cars previously accepted by the Authority shall commence on the date remediation and correction by the Contractor is completed on the entire fleet accepted up to that date (“Corrected Date”). The period of warranty for a Fleet Defect shall be the greater of the full period of the entire original warranty on the defective Unit or one year from the first Corrected Date, whichever is longer.
D. If a failure of a single item on one Rail Car represents a higher percentage than twenty percent, that single failure shall not constitute a Fleet Defect and shall be addressed as an isolated problem.
E. Each incident of an item failure shall count as a single Rail Car failure, even if multiple item failures are recorded on one Rail Car until such time that the first item that failed is corrected. If the failure occurs after a correction is made, it will be added to the failure count as a new failure.
F. Fleet Defects shall be cured in accordance with a Failure Mode Analysis and Recovery Plan, which shall be agreed upon by the parties and identify the nature of the problem, analyze its cause, and designate remedial action to be taken, which may include replacement, redesign, repair and/or adjustment.
G. The components, systems, subsystems...